John Mackey, Cofounder and Co-CEO of Whole Market, Believes in "Conscious Capitalism" (pp. 29 & 30)

Charles M. Carson, (2005),"A historical view of Douglas McGregor's Theory Y", Management Decision, Vol. 43 Iss 3 pp. 450 - 460

McGregor first published his ideas in his book, The Human Side of Enterprise. One of the experiences he had that influenced his thoughts was from work that he did at his grandfather’s establishment for temporary workers in Detroit. Because he was a close acquaintance of Abraham Maslow, who developed “Maslow’s Hierarchy of Needs,” McGregor wished to counter the scientific approach on management (“Douglas McGregor,” 2008) and named Theories X & Y.

In A Capitalist Manifesto, Gary Wolfram provides an explanation of how free market systems work in society and highlights their benefits compared to socialist economies. The first chapters of the book are an introduction to microeconomics: how marginal analysis, supply, demand, market equilibrium, opportunity cost, and profits work. According to him there are three fundamental advantages to a market economy: it allocates resources efficiently, consumers determine wages and therefore income distribution is fair, and finally it’s the only method of organizing society that is consistent with individual liberty. He explains that socialism is an economic system that is is unable to provide a decent standard of living for people and that it cannot survive, giving as an example the fall of the Iron Curtain. The reason is that

When managing people, McGregor’s model, indicated below, shows to styles of management. Theory X is directive, whereas Theory Y is enabling, and looks at employee engagement/ teamwork in order to achieve the

John Mackery believes that Conscious Capitalism is a valuable concept that builds the business model affecting the major stakeholders, including: customers, employees, investors, suppliers, and communities (Kreitner, & Kinicki, 2013). Obviously, Mackery's desire to improve his company, leads to the understanding of how the Theory Y plays a major role at Whole Foods. Leadership effects all aspects of a business, and without the proper vision, planning and knowledge of how people react, success will be minimized. Observing human behavior, was an area of expertise in McGregor's Human Relation Movement, known as a people friendly friendly approach (Kreitner, & Kinicki, 2013).

A vehicle cannot run without its engine. Likewise, in today’s advancing world, conscious capitalism is a necessary component in the effective operation of an organization. The values that fuel this engine include conscious leadership, stakeholder orientation, conscious culture, and a higher practice. Whole Foods is the greatest example of conscious capitalism. As part of their philosophy, there is a balance between what’s good for shareholders, employees, customers, vendors, the community, and the environment. Whole Foods ultimately believes that all stakeholders are important, which makes it necessary for everyone to cooperatively work

Both Douglas McGregor 's Theory X and Theory Y have their strengths and its weaknesses. One of the advantages that this theory is quite understandable. On the other hand, it can help managers focus on two different types of individuals: individual work and personal hate willing to work. Because of the weaknesses and shortcomings, the theory can hardly be used right now. According to McGregor, theory X assumes people dislike work, lack ambition, are irresponsible and prefer to be led, while theory Y assumes people are willing to work and accept responsibility, and are self-directed and creative. Based on some research, theory

John Locke was a philosopher that didn’t think human thought was based on pure egoistic behavior. Locke believed people were partially altruistic, believing that people respected the rights of others by rational thought capabilities. There is speculation about how John Locke would view the modern idea of American Capitalism and how it would complement or conflict his idea of the social contract. I will argue that John Locke would be against this interpretation of modern capitalism.

McGregor’s Theory Y is definitely portrayed in Whole Foods’ values. McGregor came up with Theory Y to break the negative attitude that managers had towards their employees. Theory Y is “a modern and positive set of assumptions about people” (Kanicki & Kreitner, 2010, p. 9). Theory X and Theory Y are exact opposites, as Theory X managers bully and intimidate their employees (Kanicki & Kreitner, 2010). In this case study, Whole Foods is portrayed as a company that “co-creates a world where each of us, our communities and our planet can flourish” (Whole Foods, n.d., para. 5). The Theory Y format followed by Whole Foods realizes that “not only do managerial attitudes matter, but how managers behave towards employees affects both individual

Whole Foods CEO, John Mackey, is very aware that the actions and decisions of his corporation impact various stakeholder groups and the environment. He believes in being a good corporate citizen by donating 5% of the company’s profits to local charities. Mackey is also a big proponent of the compassionate treatment of animals and prefers to buy animal products from farmers who follow these guidelines; Whole Foods uses this as a market niche to attract customers who also feel strongly about this issue. Whole Foods

Given the statements from John Mackey, it is his vision to create a positive working environment and Theory Y plays somewhat of a role at Whole Foods. Although Whole Foods wants to

Douglas McGregor was an American professor and psychologist who is most famous for his book, The Human Side of Enterprise, published in 1960. In this work, he conceives and examines two theories of behaviors in the workplace. They are known as Theory X and Theory Y. These distinct theories describe how individuals generally behave at work and how different types of managers might govern their employees. They have been used over the years to help managers to understand their employees’ needs, behavior and how to better manage their staff. These theories can be analyzed and broken down into three of many sub-topics: Motivation, Leadership Style and Conflict Resolution.

2007). Kermally (2005, p.36) explain that McGregor believed ‘how managers manage people in practice depends on what assumptions they make about workers’. It means that which kind of leadership managers choose, according to how managers perceive workers’ attitudes toward their job. Managers believe their workers related to Theory X and Y normally use strict supervision approaches to reduce workers’ control on their job, in contrary, managers allow workers to be innovative and willing to authorise more responsibility to Theory Y workers (Waddell et al. 2007).

In this essay, I will analyse and compare the traditional models of Fayol and Barnard together with the more contemporary model of McGregor. The theories will be linked with my personal working experience by which I will demonstrate their relevance and role in practice. The essay will try to critically analyse and explain the differences between the three models and their applicability in today’s modern business environment. At the end, I will give my perspective of what management might mean for contemporary business organisations.

McGregors X and Y theory are his model that he used to urge managers to move away from the set of assumptions he called Theory X (people dislike work, lack ambition, prefer to be led than lead) and towards Theory Y. Theory Y assumes people are willing to work, capable of self-control, thrive when given responsibility and the opportunity to self-direct. Les Mills managers display strong Theory Y perspectives and this helps to empower employee’s by promoting continual staff development through a variety of avenues. The “Little Yellow Book” (LYB) focuses on the values the company follows and the ways in which it wishes to do business. The book states the purpose of Les Mills (“To improve the lives of New Zealanders”) and gives direction to the staff, educating them on 5 key business strategies. The book also outlines the way in which employees are expected to behave and the things Les Mills expects of them. The LYB is integral to empowering employees by endowing them with responsibilities and expectations the company has for them. By doing this they are offering employees opportunities for building self-esteem and satisfying